IMF Backs Lithuania Fiscal Shift From Austerity Focus

Feb. 11 (Bloomberg) -- The International Monetary Fund
expressed support for the new Lithuanian government’s shift from
spending cuts to boosting revenue and backed the Baltic nation’s
plans to continue narrowing its budget deficit.

“Lithuania has the lowest revenue-to-GDP ratio in the
European Union, and there’s a lot of scope to shift the
adjustment more to the revenue side,” Julie Kozack, the head of
an IMF mission, told reporters today in the capital, Vilnius.

Prime Minister Algirdas Butkevicius took office in December
after his Social Democrat party won elections on pledges to end
fiscal-austerity policies that reduced the country’s deficit to
3 percent of gross domestic product last year from 9.4 percent
of GDP in 2009. There were better ways to continue fiscal
discipline, he said at the time, promising to reduce this year’s
gap to 2.5 percent of GDP.

Plans to boost revenue center on promoting investments to
stimulate growth and fighting tax evasion in the form of
smuggling and illegal wage payments, Butkevicius said today at
the same news conference.

“It’s very important for Lithuania to continue to rebuild
its fiscal buffer,” said Kozack, a deputy division chief at the
IMF’s Europe Department.